• Mon. Jan 30th, 2023



Tech Nation’s Pledge aims to facilitate UK fintech sector partnerships

  • Tech Nation launched The Fintech Pledge, setting guidelines for banks to collaborate with fintechs.
  • And The Fintech Pledge aims to support the UK’s position as a global fintech leader.
  • Insider Intelligence publishes hundreds of insights, charts, and forecasts on the Fintech industry with the Fintech Briefing. You can learn more about subscribing here.

The Fintech Pledge, launched by networking platform Tech Nation, sets standards and principles for banks to collaborate with fintechs, per its press release.

UK Open Banking Ecosystem

UK Fintech Pledge sets voluntary collaboration guidelines between banks and startups.

Business Insider Intelligence

These include signatory banks providing clear guidance to startups about onboarding processes via a dedicated online landing page, sharing feedback, and encouraging good practices. Participating banks—which already include Barclays, HSBC, Lloyds, NatWest, and Santander—commit to implementing these standards six months from signing the pledge.

The Fintech Pledge aims to support the UK’s position as a global fintech leader by solving remaining pain points in bank-fintech collaborations.

  • The UK boasts a mature fintech environment thanks to proactive regulators and banks embracing the sector. The UK pioneered open banking regulations, enabling fintechs to access data previously exclusively owned by incumbents. Now, 66.7% of UK financial institutions perceive open banking as an opportunity for growth, which is almost 10% higher than the European average. Major banks in the UK, such as Barclays, have also launched their own accelerator programs to benefit from fintechs’ innovative solutions.
  • However, banks and fintechs’ conflicting working styles make it difficult to partner effectively. Fintechs tend to work at a faster pace, leveraging their flat organizational structure and agile process frameworks to roll out features rapidly. In contrast, incumbent banks are highly bureaucratic, organizationally complex, and lack a single decision-maker, slowing down the pace of change: 70% of fintechs worldwide say they are frustrated by incumbent banks’ process barriers. The Fintech Pledge should help solve this as signatory banks will now have to provide clear guidance and feedback with them to ensure the partnership process is as seamless as possible.

Tech Nation should review the Fintech Pledge’s implementation over the next year to identify other hurdles to collaboration—and based on this, devise guidelines directed at fintechs. The Pledge currently focuses on harmonizing processes among banks, but collaboration is a two-way street.

As banks begin to implement the new standards over the next few months, Tech Nation should assess what fintechs can do to improve their own operations and make them more compatible with banks’ processes. For example, as fintechs tend to have more flexible organizational structures than banks, they should be prepared to adapt their systems to banks’ timelines and working conditions.

In addition, guidelines could include enhancing transparency over their governance practices, which would reassure banks that fintechs are controlling risks rather than exposing themselves and their partners to possible vulnerabilities—as was the case with Wirecard. This way, banks and fintechs can meet in the middle, facilitating more effective collaborations than if only the incumbents were subject to changes.

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